Norwegian gas giant Equinor said it would be cutting overall payments to shareholders despite beating analyst expectations for a weaker 2023.
The company, which is majority-owned by the government of Norway with a 67 per cent stake, saw net operating income plunge to $36.2bn (£28.6bn) in 2023 from a record-breaking $76.9bn (£60.9bn) in 2020 as gas prices climbed down from the highs seen after Russia invaded Ukraine.
Accordingly, Equinor will reduce the amount paid to shareholders from $17bn (£13.4bn) last year to $14bn (£11bn) this year as more money will be put back into the business.
The firm overtook Russian provider Gazprom as Europe’s largest natural gas supplier after the continent severed ties with the former to try and prevent funding Russia’s military machine.
For the fourth quarter of 2023, revenues came in at $8.7bn (£6.8bn), down from $17bn (£13.5bn) a year earlier.
The group’s combined oil and gas output grew by 2.1 per cent in 2023 as a result of a strong finish to the year and beat the company’s October guidance of 1.5 per cent growth.
It plans on spending the 2023 level of $6bn (£4.8bn) in share buybacks in 2024.
“We expect to grow our cash flow and sustain competitive returns and we are extending the outlook for stable contribution from oil and gas to 2035,” chief executive Anders Opedal said in a statement.
One area that remains a going concern for the Norwegian giant is its flagging renewables division.
Operating losses for the unit grew nearly eight per cent to $757m (£600m) against a year prior as impairment costs for offshore wind projects in the U.S. came home to roost.
Yesterday, oil supermajor BP said it “divorced” itself from the Empire Two wind project joint venture it held with Equinor until the end of last year, when inflation, interest rates and supply chain disruptions saw BP exit the project at a $500m (£395m) cost.
Opedal said the company remains “well-positioned to deliver profitable growth,” in the sector but estimated that “rapid cash flow growth” may not come before 2030.
This morning, Danish wind giant Orsted announced a dividend pause as a period of corporate restructuring begins to try and fix widening losses and project delays.